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Time to Hit Lick
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<blockquote data-quote="1982vett" data-source="post: 695279" data-attributes="member: 7795"><p>Expect a Shallow, Low-Inflation Recovery</p><p></p><p>By Vincent Farrell Jr.</p><p>9/4/2009 9:01 AM EDT</p><p><span style="color: #008080">TheStreet.com</span> <span style="color: #800000">RealMoney</span></p><p> </p><p>Lyle Gramley, Soleil's chief economist, recently wrote a piece about the first year of a recovery. He looked at nine prior recessions and found some interesting takeaways. </p><p></p><p>The average recovery for the nine rebounds was 5.8% in the four quarters following the end of the recession. When the recession was deeper (an average of -2.7% for five of them), the recovery was more pronounced and showed an average gain of 7.1%. When less severe (four recessions with an average decline of 1.1%), the rebound was milder at an average gain of 4.1%. </p><p></p><p>Net exports are usually a drag as the U.S. recovers more quickly than the rest of the world and inventory rebuild usually draws imports. Consumer spending is often a smaller part of a recovery than it would be for a normal economic period, but it's still critical. </p><p></p><p>The key to the consumer segment is wage growth. Since wage and salary income is below a year ago, and since the consumer is still stretched and is in a conservative frame of mind, Lyle believes the recovery will be muted. Inflation usually goes down the first year of a recovery, so interest rates will stay low. </p><p></p><p>His conclusion in one sentence would be to expect a shallow recovery with low inflation...(<em><span style="color: #0040FF">goes on to give some stock picks</span></em>)</p></blockquote><p></p>
[QUOTE="1982vett, post: 695279, member: 7795"] Expect a Shallow, Low-Inflation Recovery By Vincent Farrell Jr. 9/4/2009 9:01 AM EDT [color=#008080]TheStreet.com[/color] [color=#800000]RealMoney[/color] Lyle Gramley, Soleil's chief economist, recently wrote a piece about the first year of a recovery. He looked at nine prior recessions and found some interesting takeaways. The average recovery for the nine rebounds was 5.8% in the four quarters following the end of the recession. When the recession was deeper (an average of -2.7% for five of them), the recovery was more pronounced and showed an average gain of 7.1%. When less severe (four recessions with an average decline of 1.1%), the rebound was milder at an average gain of 4.1%. Net exports are usually a drag as the U.S. recovers more quickly than the rest of the world and inventory rebuild usually draws imports. Consumer spending is often a smaller part of a recovery than it would be for a normal economic period, but it's still critical. The key to the consumer segment is wage growth. Since wage and salary income is below a year ago, and since the consumer is still stretched and is in a conservative frame of mind, Lyle believes the recovery will be muted. Inflation usually goes down the first year of a recovery, so interest rates will stay low. His conclusion in one sentence would be to expect a shallow recovery with low inflation...([i][color=#0040FF]goes on to give some stock picks[/color][/i]) [/QUOTE]
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